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Companies take action towards living wages

Today IDH, The Sustainable Trade Initiative announced with global companies Aldi Nord, Aldi Sud, Eosta, Fyffes, Fairphone, L’Oréal, Schijvens, Superunie, Taylors of Harrogate, and Unilever to take action towards living wages.

In a joint Call to Action: Better Business through Better Wages, they call on other companies to do the same.

In the Call to Action, the group of companies express that the old business model looked to low wages as a profitability driver. The new model sees well-paid workers as an integral part of a profitable, sustainable and resilient business.

A living wage provides workers and their families with a decent standard of living. A living wage is enough to provide for their family’s basic needs for food, water, clothing, housing, education, transportation and healthcare.

“To eradicate poverty, a living wage is the first step. Helping workers achieve a living wage is a shared responsibility across the entire supply chain, but the business community must be a driving force. We are proud that ten companies already will work together towards living wages and encourage other businesses to join the call to action and do the same,” says Daan Wensing, CEO, IDH, The Sustainable Trade Initiative.

Pervasive social inequality harms prosperity of economies and societies. The past year has undoubtedly widened the social divide. Now businesses have an opportunity to change the way their business models operate to benefit wider society, breaking the cycle of poverty and strengthening the foundations of the global economy, while driving business growth.

“We have committed that by 2030, everyone who directly provides goods and services to Unilever will earn at least a Living Wage or a Living Income. Because without a healthy society, there cannot be a healthy business,” says Marc Engel, Chief Supply Chain Officer, Unilever.

Alexandra Palt, Executive Vice-President – Chief Corporate responsibility Officer, L’Oréal added: “In the current difficult global context, companies, more than ever, can and must take action to alleviate poverty. One way we can help mitigate inequality is by applying a Living Wage policy. Naturally, within our companies, but also by expending it throughout our supply chains. This is our commitment at L’Oréal: by 2030, all our strategic suppliers’ employees will be paid at least a living wage. This is a challenging target, but we are optimistic to achieve it with the support of our suppliers. We need to do this collectively in order to have a significant impact.”

IDH Roadmap on Living Wages

The IDH Roadmap on Living Wages develops and scales solutions for workers in the global supply chain for a living wage. The companies that joined the Call to Action will work with the Roadmap to develop and scale solutions for workers in global supply chains with the ultimate goal of a living wage.

Specific actions include:

  1. Identifying living wage gaps in our own operations and supply chains, with a specific focus on the gender pay gap.
  2. Establishing shared frameworks with supply chain partners to close the gap, with concrete milestones.
  3. Joining in multi-stakeholder partnerships that target areas with large living wage gaps.
  4. Building awareness and understanding among consumers of how they contribute to better livelihoods.
  5. Implementing practical solutions to remove barriers and close living wage gaps and share costs in an equitable way.
  6. Supporting freedom of association with robust social dialogue and wage setting mechanisms.
  7. Adopting sustainable procurement and trading practices, including living wage requirements as part of commercial specifications, sourcing policies and/or contractual clauses/purchasing agreements.
  8. Ensuring that value created actually reaches workers.
  9. Transparently reporting on progress towards a living wage.
  10. Sharing learnings, challenges and solutions to inform and elevate all efforts as we find new pathways for reaching living wages.

Working together across stakeholders

Achieving a more sustainable, equitable approach to business will require creative approaches from all stakeholders, including government, civil society, trade unions, investors and more, to remove barriers. Such barriers are also listed in the Call to Action.

Read more on the Call to Action here: https://www.idhsustainabletrade.com/cta-living-wages/

About IDH

The Sustainable Trade Initiative IDH is an international organisation that works with businesses, financiers, governments and civil society to realise sustainable trade in global value chains. Funded by different governments and foundations, IDH delivers scalable, economically viable impact on the Sustainable Development Goals and at the same time creates value for all parties along the entire supply chain. IDH brings together over 600 companies and governments to promote and improve new sustainable production and trade models in emerging economies. More info: https://www.idhsustainabletrade.com/

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